Business strategy, by which is meant the set of decisions governing how to compete in the private sector, has long been the subject of careful deliberation. Most large companies have a senior employee charged with strategic planning, if not whole departments established for this purpose. It is commonplace, too, for companies to engage the help of professional outsiders (consultants, management consultants, strategy consultants, efficiency experts . . . they go by many names) to advise them in how best to set company strategy.
Typically the individuals engaged in this field rely on a set of highly qualitative texts and tools to develop decisions. Some of the most common examples include: SWOT analysis, Michael Porter's Five Forces Model, the BCG Growth-Share Matrix. Each of these outlines a way to structure and depict company information, that then corresponds to some prescriptive wisdom of how to behave strategically. For example, for divisions performing in the upper left quadrant of a Growth-Share Matrix, which would be labeled “Stars”, the prescription is to “invest for leadership”.
A few tools, such as the Experience Curve or EVA (Economic Value Added), are quite rigorously quantitative, but fall short in providing specificity around what is to be done as a result of whatever information the analysis yields. In this manner, they are closer to being metrics than diagnostic tools, and as such bear most in common with the Baldrige criteria or the “Balanced Scorecard” concepts.
One of the highest level types of strategy is Growth Strategy. There are a range of tactics typical of companies trying to grow company profits. These tactics might include acquisitions, new product introduction, cost reduction, share gain in existing markets, and new market entry. While there are techniques specific to screening acquisitions, or prioritizing alternative markets for entry decisions, there is no known tool for determining what is the optimal mix of the various types of alternative growth initiatives.